UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X]      QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended:  September 30, 2003

[ ]      TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
         EXCHANGE ACT
         For the transition period from __________________ to _______________

                         Commission file number 0-30721

                               IPEC HOLDINGS INC.
        (Exact name of small business issuer as specified in its charter)

             NEVADA                                            87-0621339
  (State or other jurisdiction of                           (IRS Employer
   incorporation or organization)                         Identification No.)

         NORTHGATE INDUSTRIAL PARK, 185 NORTHGATE CIRCLE, P.O. BOX 5311
                         NEW CASTLE, PENNSYLVANIA 16105
                    (Address of principal executive offices)

                                 (800) 377-4732
                           (Issuer's telephone number)

    RD#3, BOX 7-A, NORTHGATE INDUSTRIAL PARK, NEW CASTLE, PENNSYLVANIA 16105
              (Former name, former address and former fiscal year,
                          if changed since last report)

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days. Yes _X_ No ___

    State the number of shares outstanding of each of the issuer's classes of
               common equity, as of the latest practicable date:
            9,972,912 SHARES OF COMMON STOCK, $0.001 PAR VALUE, AS OF
                                NOVEMBER 10, 2003

    Transitional Small Business Disclosure Format (check one): Yes ___ No _X_

<PAGE>

                              IPEC HOLDINGS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS



<TABLE>
<CAPTION>
                                                          September 30,       December 31,
                                                              2003                2002
                                                           (Unaudited)        (Restated)
                                                         ----------------------------------
<S>                                                      <C>                 <C>
                        Assets
 Cash                                                    $      737,573      $      84,661
 Accounts Receivable, less allowance for doubtful             1,793,314            937,168
    accounts of $198,000 and $157,881, respectively
 Other Receivables                                               31,878             48,977
 Inventory                                                    2,539,870          2,634,742
 Prepaid Expenses                                               101,095              5,549
                                                         ---------------     --------------
                    Current Assets                            5,203,730          3,711,097
                                                         ---------------     --------------

 Land                                                           119,374            119,374
 Buildings and Equipment                                     18,361,234         17,122,861
 Construction In Progress                                       104,253            406,307
 Accumulated Depreciation                                    (6,978,217)        (6,196,300)
                                                         ---------------     --------------
           Property, Plant & Equipment, Net                  11,606,644         11,452,242
                                                         ---------------     --------------

 Patents, less accumulated amortization of                      294,170            299,395
    $88,452 and $78,702, respectively
 Other Assets                                                    99,678              9,173
                                                         ---------------     --------------
                     Other Assets                               393,848            308,568
                                                         ---------------     --------------
                     Total Assets                        $   17,204,222      $  15,471,907
                                                         ===============     ==============

</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                        2
<PAGE>

                              IPEC HOLDINGS, INC.
                     CONDENSED CONSOLIDATED BALANCE SHEETS




<TABLE>
<CAPTION>
                                                         September 30,        December 31,
                                                             2003                 2002
                                                          (Unaudited)          (Restated)
                                                        -----------------------------------
<S>                                                     <C>                  <C>
         Liabilities and Shareholders' Equity

Accounts Payable                                        $     910,109        $    800,753
Accrued Liabilities                                           244,122             109,281
Taxes Payable                                                     -                16,426
Accrued Interest                                                8,261              31,657
Notes Payable - Current Portion                             1,624,969           1,416,436
Bank Line Of Credit                                         4,880,000           2,550,000
Capital Lease Obligation - Current Portion                     24,248             169,820
                                                        --------------       -------------
                 Current Liabilities                        7,691,709           5,094,373
                                                        --------------       -------------

Deferred Income Taxes                                         260,117              69,000
Capital Lease Obligation                                       49,090              74,642
Notes Payable - Long Term                                   4,420,630           5,732,086
                                                        --------------       -------------
                Long Term Liabilities                       4,729,837           5,875,728
                                                        --------------       -------------

Preferred Stock, no par value, 1,000,000 shares
   authorized, no shares issued
Common Stock, par value $0.001 per                              9,973               9,973
   share, 100,000,000 shares authorized,
   9,972,912 shares issued and
   outstanding at September 30, 2003
   and December 31, 2002
Additional Paid In Capital                                  4,377,994           4,376,894
Retained Earnings                                             394,709             114,939
                                                        --------------       -------------
                Shareholders' Equity                        4,782,676           4,501,806
                                                        --------------       -------------
Total Liabilities and Shareholders' Equity              $  17,204,222        $ 15,471,907
                                                        ==============       =============
</TABLE>



         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                        3
<PAGE>

                               IPEC HOLDINGS INC.
                STATEMENTS OF CONDENSED CONSOLIDATED OPERATIONS


<TABLE>
<CAPTION>
                                        Three Months        Three Months          Nine Months        Nine Months
                                           Ended               Ended                Ended              Ended
                                        September 30,       September 30,        September 30,      September 30,
                                            2003                2002                 2003               2002
                                        (Unaudited)        (Unaudited)(a)         (Unaudited)      (Unaudited)(a)
                                      ----------------    ----------------     ----------------   ----------------
<S>                                   <C>                  <C>                 <C>                 <C>

Sales                                 $    4,331,360       $   3,791,642       $   12,125,265      $   10,724,479
                                      ---------------      --------------      ---------------     ---------------

Operating expenses
   Cost of sales                           3,364,017           2,659,028            9,053,431           7,447,811
   Selling                                   344,336             189,158            1,050,026             589,283
   General and administrative                366,308             250,490            1,137,509             903,566
                                      ---------------      --------------      ---------------      --------------
       Operating expenses                  4,074,661           3,098,676           11,240,966           8,940,660
                                      ---------------      --------------      ---------------      --------------
Operating income                             256,699             692,966              884,299           1,783,819
                                      ---------------      --------------      ---------------      --------------

Non-operating expense (income)
   Interest expense                          153,497             158,628              454,343             470,229
   Other income                              (19,025)             (6,017)             (22,705)            (14,884)
                                      ---------------      --------------      ---------------      --------------
       Non-operating expenses                134,472             152,611              431,638             455,345
                                      ---------------      --------------      ---------------      --------------

Income before taxes                          122,227             540,355              452,661           1,328,474
Provision for income taxes                   (44,391)            (94,000)            (172,891)           (297,200)
                                      ---------------      --------------      ---------------      --------------

Net income                            $       77,836       $     446,355       $      279,770       $   1,031,274
                                      ===============      ==============      ===============      ==============

Average Shares of Common Stock
   - Basic                                 9,972,912           9,972,909            9,972,912           9,922,786
                                      ===============      ==============      ===============      ==============

Average Shares of Common Stock
   - Diluted                              10,041,945          10,066,434           10,181,480           9,997,606
                                      ===============      ==============      ===============      ==============

Basic Net Income Per Share            $         0.01       $        0.04       $         0.03       $        0.10
                                      ===============      ==============      ===============      ==============

Diluted Net Income Per Share          $         0.01       $        0.04       $         0.03       $        0.10
                                      ===============      ==============      ===============      ==============

(a) Certain items have been reclassified to conform to the current year presentation.

</TABLE>

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.

                                        4
<PAGE>

                               IPEC HOLDINGS INC.
                STATEMENTS OF CONDENSED CONSOLIDATED CASH FLOWS


<TABLE>
<CAPTION>
                                                       Nine Months Ended       Nine Months Ended
                                                      September 30, 2003      September 30, 2002
                                                          (Unaudited)             (Unaudited)
                                                      ------------------      ------------------
<S>                                                    <C>                     <C>
Cash Flows from Operating Activities:
Net Income                                             $       279,770         $     1,031,274
Adjustments to reconcile net income to net cash
provided by operating activities
    Depreciation and amortization                            1,285,381               1,025,149
    Deferred taxes                                             191,117                 161,800
    Common stock issued for services                             1,100                  25,000
Working Capital Items:
    Accounts receivable                                       (856,146)               (564,436)
    Other receivables                                           17,099                  37,944
    Inventory                                                   94,872                (386,334)
    Prepaid Expenses                                           (95,546)                 (6,913)
    Other Assets                                               (90,505)                 (3,000)
    Accounts payable                                           109,356                  78,451
    Accrued liabilities                                        106,554                  38,889
    Taxes payable                                              (16,426)                119,114
    Accrued interest                                           (23,396)                    -
                                                       ----------------        ----------------
Net cash provided by operating activities                    1,003,230               1,556,938
                                                       ----------------        ----------------

Cash Flows from Investing Activities:
Purchases of property, plant and equipment                  (1,423,133)             (1,660,651)
Investment in and development of patents                       (11,425)                 (3,722)
                                                       ----------------        ----------------
Net cash used in investing activities                       (1,434,558)             (1,664,373)
                                                       ----------------        ----------------

Cash Flows from Financing Activities
Borrowing on bank line of credit                             2,332,492                 955,000
Repayments on bank line of credit                               (2,492)             (1,315,000)
Repayments of capital lease obligations                       (171,124)               (109,894)
Borrowings on long-term debt                                       -                 1,150,000
Repayments on long-term debt                                (1,074,636)               (784,228)
Amount paid to related parties                                     -                  (700,000)
                                                       ----------------        ----------------
Net cash provided / (used) by financing activities           1,084,240                (804,122)
                                                       ----------------        ----------------

Net Increase / (Decrease) in cash                              652,912                (911,557)
Cash - beginning of period                                      84,661               1,014,381
                                                       ----------------        ----------------
Cash - end of period                                   $       737,573         $       102,824
                                                       ================        ================

Supplemental Cash Flow Information:
Cash paid for interest, net of capitalized amount
  of $21,500 and $14,500, respectively                 $       456,239         $       470,229
                                                       ================        ================
Cash paid for income taxes                             $           -           $        16,286
                                                       ================        ================
</TABLE>



          The accompany notes are an integral part of these condensed
                       consolidated financial statements.

                                        5
<PAGE>


                               IPEC HOLDINGS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

1. DESCRIPTION OF BUSINESS

IPEC  Holdings,  Inc. (the  "Company" or "IPEC")  manufactures  and sells tamper
evident plastic closures.  These closures are predominantly used in the bottling
of  non-carbonated  beverages  including  bottled water,  milk, fruit and sports
drinks.  The Company also designs and  manufactures  capping  equipment.  IPEC's
customer base primarily  consists of dairy and bottled water  manufacturers both
domestically and internationally.

2.  BASIS  OF  PRESENTATION  AND  RESTATEMENT  OF  2002  CONSOLIDATED  FINANCIAL
STATEMENTS

The accompanying unaudited condensed consolidated balance sheets as of September
30, 2003 and December 31, 2002 and  statements of operations  and cash flows for
the three and nine month  periods  ended  September  30, 2003 and 2002 have been
prepared by IPEC Holdings Inc.  ("Company") in accordance with the  instructions
for SEC Form 10-QSB and, accordingly, do not include all disclosures required by
accounting  principles  generally  accepted  in the United  States for  complete
financial  statements.  The  financial  statements  at  September  30,  2003 and
December  31,  2002  include  the  accounts  of  IPEC   Holdings  Inc.  and  its
wholly-owned  subsidiary.  In the  opinion of  management  of the  Company,  all
adjustments,  consisting of normal recurring accruals considered necessary for a
fair presentation,  have been included.  The results of operations for the three
and nine month periods ended  September 30, 2003 are subject to various  factors
including  seasonality  and  are not  necessarily  indicative  of the  operating
results to be expected for the full fiscal year ending on December 31, 2003.

Interim  unaudited  condensed  consolidated  financial results should be read in
conjunction  with the audited  financial  statements  included in the  Company's
Annual Report on Form 10-KSB, as amended, for the fiscal year ended December 31,
2002.

The accompanying  consolidated  financial statements as of December 31, 2002 and
for the year then  ended have been  restated  from  those  previously  issued to
account for the issuance of 200,000  common stock warrants in November 2002, net
of tax effects. The restatement  decreased net income for the fourth quarter and
year ended December 31, 2002 by $148,200 and basic and dilutive income per share
by $.01.

3.  RECENT ACCOUNTING PRONOUNCEMENTS

Effective  January 1, 2003,  the Company  adopted SFAS No. 145,  "Rescission  of
Financial  Accounting  Standards Board's ("FASB")  Statements No. 4, 44, and 64,
Amendment of FASB Statement No. 13, and Technical  Corrections."  This statement
updates,  clarifies and simplifies  existing  accounting  pronouncements.  Among
other  provisions,  prospectively,  as a result of the adoption of SFAS No. 145,
debt extinguishment  costs will no longer be treated as extraordinary items. The
impact  of  adopting  SFAS  No.  145 did not have any  impact  on the  Company's
financial statements for the first nine months of fiscal year 2003.

In  November  2002,  the FASB issued FASB  Interpretation  No. 45,  "Guarantor's
Accounting  and  Disclosure  Requirements  for  Guarantees,  Including  Indirect
Guarantees  of  Indebtedness  of Others"  ("FIN 45").  FIN 45 requires that upon
issuance of a guarantee,  a guarantor  must  recognize a liability  for the fair
value  of an  obligation  assumed  under  a  guarantee.  FIN  45  also  requires
additional  disclosures  by a  guarantor  in its  interim  and annual  financial
statements  about  the  obligations   associated  with  guarantees  issued.  The
recognition provisions of FIN 45 are effective  prospectively for any guarantees
that are issued or modified  after  December 31, 2002.  The provisions of FIN 45
did not have any impact on the  Company's  results of  operations  or  financial
condition.

                                        6
<PAGE>

                               IPEC HOLDINGS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

In January 2003, the FASB issued FASB  Interpretation No. 46,  "Consolidation of
Variable  Interest  Entities -- an interpretation of ARB No. 51" ("FIN 46"). FIN
46  clarifies  the   application  of  Accounting   Research   Bulletin  No.  51,
"Consolidated  Financial  Statements,"  to  certain  entities  in  which  equity
investors do not have the characteristics of a controlling financial interest or
do not have  sufficient  equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. FIN 46 was
effective  January 31, 2003 and upon adoption the Company has determined that it
does not have any variable interest entities as defined in FIN 46.

Effective  May 1, 2003,  the FASB  issued  SFAS No. 150  Accounting  for Certain
Financial  Instruments with Characteristics of both Liabilities and Equity. This
Statement  establishes  standards  for how an  issuer  classifies  and  measures
certain  financial  instruments  with  characteristics  of both  liabilities and
equity.  It primarily  requires that an issuer classifies  financial  instrument
that is within its scope and  previously  classified  as equity as a  liability.
This statement is effective for financial  instruments  entered into or modified
after May 31, 2003,  and  otherwise  is effective at the  beginning of the first
interim period beginning after December 15, 2003. The adoption of this statement
did not have any effect on the  Company's  results of  operations  or  financial
condition.

In January 2003, the EITF released  Issue No. 00-21,  ("EITF  00-21"),  "Revenue
Arrangements with Multiple Deliverables," which addresses certain aspects of the
accounting  by a vendor for  arrangement  under which it will  perform  multiple
revenue-generating  activities.  Specifically,  EITF 00-21 addresses  whether an
arrangement  contains more than one unit of accounting and the  measurement  and
allocation to the separate units of accounting in the arrangement. EITF 00-21 is
effective  for revenue  arrangements  entered into in fiscal  periods  beginning
after June 15, 2003.  Management is currently  assessing the impact, if any, the
adoption of EITF 00-21 will have on Company's results of operations or financial
condition.

4.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

EMPLOYEE STOCK OPTION PLANS

Statement of Financial Accounting Standards No. 148, "Accounting for Stock-Based
Compensation--Transition and Disclosure an Amendment of FASB Statement No. 123",
amends  the  disclosure   requirements  of  Statement  of  Financial  Accounting
Standards No. 123,  "Accounting for Stock-Based  Compensation"  ("SFAS 123"), to
require  more  prominent  disclosures  in  both  annual  and  interim  financial
statements   regarding  the  method  of  accounting  for  stock-based   employee
compensation and the effect of the method used on reported results.

The Company accounts for stock-based awards to employees and directors using the
intrinsic value method of accounting in accordance  with  Accounting  Principles
Board Opinion No. 25,  "Accounting  for Stock Issued to  Employees"  ("APB 25").
Under the intrinsic  value method,  because the exercise  price of the Company's
employee stock options  equals the market price of the  underlying  stock on the
date  of  grant,  no  compensation   expense  is  recognized  in  the  Company's
Consolidated Statements of Operations.

The  Company is  required  under SFAS 123,  to  disclose  pro forma  information
regarding  option  grants made to its  employees  based on  specified  valuation
techniques  that  produce  estimated   compensation   charges.   The  pro  forma
information is as follows:

                                        7

<PAGE>

                               IPEC HOLDINGS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)




<TABLE>
<CAPTION>

                                               Three Months        Three Months         Nine Months        Nine Months
                                                  Ended               Ended                Ended              Ended
                                               September 30,       September 30,        September 30,      September 30,
                                                   2003                2002                 2003               2002
                                              --------------      --------------       --------------     --------------
<S>                                           <C>                 <C>                  <C>                <C>
Net Income - as reported                      $      77,836       $     446,355        $     279,770      $   1,031,274
Compensation expense - net of tax                   153,122             138,983              244,531            156,106
Compensation recorded in financial
 statement - net of tax                                (680)                -                   (680)               -
                                              --------------      --------------       --------------     --------------
Net Income (Loss) - pro forma                 $     (74,606)      $     307,372        $      35,919      $     875,168

Basic Net Income Per Share - as reported      $        0.01       $        0.04        $        0.03      $        0.10
                                              ==============      ==============       ==============     ==============
Dilutive Net Income Per Share - as reported   $        0.01       $        0.04        $        0.03      $        0.10
                                              ==============      ==============       ==============     ==============
Basic Net Income (Loss) Per Share - pro forma $       (0.01)      $        0.03        $        0.00      $        0.09
                                              ==============      ==============       ==============     ==============
Dilutive Net Income (Loss) Per Share - pro
 forma                                        $       (0.01)      $        0.03        $        0.00      $        0.09
                                              ==============      ==============       ==============     ==============

</TABLE>

The  value of each  option  grant is  estimated  on the date of grant  using the
Black-Scholes  option pricing model. The Black-Scholes  option pricing model was
developed for use in estimating the value of traded options that have no vesting
restrictions  and are fully  transferable.  In addition,  option  pricing models
require the input of highly subjective  assumptions including the expected stock
price  volatility.  The Company uses projected data for expected  volatility and
expected life of its stock options based upon historical and other economic data
trended into future  years.  Because the Company's  employee  stock options have
characteristics  significantly  different  from  those of  traded  options,  and
because changes in the subjective  input  assumptions can materially  affect the
estimate,  in management's opinion, the existing valuation models do not provide
a reliable measure of the fair value of the Company's employee stock options.

COMPUTATION OF NET INCOME PER SHARE

Basic earnings per share is computed using the weighted average number of shares
outstanding during the period, while diluted earnings per share is calculated to
reflect the potential  dilution that occurs related to issuance of capital stock
under stock option and warrant grants.  The difference between basic and diluted
earnings per share  relates  solely to the effect of capital  stock  options and
warrants.

For purposes of determining the number of diluted shares  outstanding,  weighted
average  shares  outstanding  for basic  earnings  per share  calculations  were
increased  due solely to the dilutive  effect of  unexercised  stock options and
warrants by 69,033 and 93,525 for the three months ended  September 30, 2003 and
2002,  respectively,  and 208,568 and 21,479 for the nine months ended September
30, 2003 and 2002, respectively.

REVENUE RECOGNITION

The Company  follows Staff  Accounting  Bulletin 101,  "Revenue  Recognition  in
Financial  Statements," in recognizing  revenues within the Company's  financial
statements.  This bulletin  requires,  among other things,  that revenue only be
recognized  when  title  has  transferred  and  risk of loss has  passed  to the
customer with the capability to pay, and that there are no significant remaining
obligations related to the sale on the part of the Company.

                                        8
<PAGE>

                               IPEC HOLDINGS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


INVENTORY VALUATION

Inventories  are stated at the lower of cost or  market.  The  Company  uses the
first-in first-out (FIFO) method for determining the cost of its inventory.  The
Company  will  record an  obsolescence  reserve  based  upon its  assessment  of
customer demand and alternative disposals methods.

SHIPPING

Amounts billed to customers for shipping  related fees are recorded as revenues.
Shipping  costs  incurred by the  Company  are  recorded as cost of sales in the
accompanying  statements of operations.  For the nine months ended September 30,
2003 and 2002, the Company  recorded  shipping charges of $278,000 and $307,000,
respectively.  For the three  months  ended  September  30,  2003 and 2002,  the
Company recorded shipping charges of and $98,000 and $92,000, respectively.

RECLASSIFICATIONS

Certain  reclassifications  have been made to prior period  balances in order to
conform to the current period presentation.

5.  INVENTORY

As of September  30, 2003 and December  31, 2002,  inventories  consisted of the
following:


                                         September 30,        December 31,
                                              2003                2002
                                        --------------      ---------------
        Raw Materials                    $    403,401        $     314,090
        Work in process                       313,225              325,814
        Finished goods                      2,433,899            2,454,838
        Reserve for obsolescence             (610,655)            (460,000)
                                         -------------       --------------
        Total Inventories                $  2,539,870        $   2,634,742
                                         =============       ==============

6.   COMMON STOCK AND EQUITY AWARDS

On  February  10,  2003,  one  of the  two  principal  shareholders  transferred
4,124,998 shares of the Company's stock to a limited partnership in exchange for
an interest in that  limited  partnership.  On April 24, 2003,  the  partnership
transferred 4,024,998 shares of the Company's stock back to the same individual.

On July 25, 2003,  the Company  granted  549,000  stock  options with a exercise
price of $1.15 to certain employees and one consultant.  The consultant grant of
1,000 shares was valued under the  provisions  of SFAS No. 123 at $1,100 using a
Black  Scholes  valuation  model.  The  consultant  grant  was  expensed  in the
accompanying  statement  of  operations  for the nine  and  three  months  ended
September 30, 2003.

In connection with the July 25, 2003 stock option grant,  the Company's Board of
Directors approved an increase to the number of authorized shares under the 2002
Stock  Option Plan to a number  equal to the greater of (i) 20% of the number of
shares  of  common  stock  outstanding  at the  end of  the  Corporation's  last
completed  fiscal year or (ii) 1,750,000.  The options  vesting  schedule is set
forth in the following table:


                                        9
<PAGE>

                               IPEC HOLDINGS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

                      VESTING DATE              SHARES
                      ------------              ------
                      July 25, 2003              24,000
                      December 31, 2004         150,000
                      December 31, 2005         125,000
                      December 31, 2006         125,000
                      December 31, 2007         125,000
                                              ----------
                      Total granted shares      549,000
                                              ==========



The  following is a schedule of option and warrant  activity  from  December 31,
2002 to September 30, 2003:


                                  OPTIONS            WARRANTS
                               -------------      --------------
         December 31, 2002        866,000             200,000
         Granted                  549,000                 -
         Forfeitures                  -                   -
         Exercised                    -                   -
                               -------------      --------------
         September 30, 2003     1,415,000             200,000
                               =============      ==============


7.   DEBT AND CAPITAL LEASE OBLIGATIONS

In early  April  2003,  the  Company's  line of credit was  increased  from $3.5
million to $5.5 million.  A portion of the increased  line of credit was used to
repay a shareholder  loan of $605,000.  The Company's  line of credit is payable
upon demand by the bank and bears interest at 4.00% as of September 30, 2003.

The following is a maturity  schedule as of September 30, 2003 for the Company's
debt components excluding the bank line of credit.

                                      Long-term          Capital Lease
                                        Debt              Obligations
                                   --------------        -------------
          2003 (three months)      $     350,583         $      9,196
          2004                         1,666,851               20,069
          2005                         1,126,182               19,719
          2006                         1,444,284               15,108
          2007                           180,685                9,246
          2008                           191,174                  -
          Thereafter                   1,114,127                  -
                                   --------------        -------------
          Total                    $   6,073,886         $     73,338
                                   ==============        =============



                                       10
<PAGE>

                               IPEC HOLDINGS INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


8.   INTANGIBLE ASSETS

The  Company's  intangible  assets  consist  of  finite-lived  patents  and  are
amortized   over  the  shorter  of  their  legal  or  estimated   useful  lives.
Amortization  expense for these intangible assets was $16,650 and $5,550 for the
nine and three months ending  September 30, 2003,  respectively,  and $7,165 and
$2,390 for the nine and three months ending  September  30, 2002,  respectively.
The  anticipated  annual  amortization  expense for these  intangible  assets is
$6,250 for 2003 (three  months)  and  $26,000  for each fiscal year 2004,  2005,
2006, 2007 and 2008.

9.   COMMITMENTS AND CONTINGENCIES

The Company is subject to various legal  proceedings  and claims  arising out of
the  normal  course  of  business.  Based  on  the  facts  currently  available,
management  believes  that the  ultimate  amount of  liability  beyond  reserves
provided,  if any,  for any  pending  actions  will not have a material  adverse
effect on the Company's financial position. However, the ultimate outcome of any
litigation is uncertain, and either unfavorable or favorable outcomes could have
a material  impact on the results of operations or liquidity of the Company in a
particular period.

10.  SUBSEQUENT EVENTS

On November 13, 2003, the Company obtained  approval from its Board of Directors
and  signed  commitment  letters  to  consummate  two  separate  sale  leaseback
transactions.  These  transactions are for the Company's two primary  production
facilities  in Brewton,  Alabama  (the  "Alabama  Transaction")  and New Castle,
Pennsylvania (the "Pennsylvania Transaction"). Upon closing, the properties will
be  transferred to two single purpose  entities  maintained by the Lessor.  Both
transactions  have a projected  closing date of December 2003 and are subject to
the Lessor's due diligence requirements and Investment Committee approval.

The net purchase price for the Alabama  Transaction is expected to be $1,750,000
which includes  proceeds of $870,000 to fund the construction of a 30,000 square
foot  warehouse  addition  to the  building.  This  transaction  is secured by a
secured letter of credit totaling  $1,680,000 and is automatically  renewable on
an annual basis subject to Lender approval. Primarily as a result of the secured
letter  of  credit,  the  Company  anticipates  treating  this  as  a  financing
transaction under the provisions of Statement of Financial  Accounting Standards
No. 98,  "Accounting  for  Leases"  and,  subject to the  actual  closing  date,
recording  an  incremental  debt  obligation  related  to  this  transaction  of
$1,650,000.  Annual  rental  payments  will be based on  combination  of a fixed
market  component  subject to agreed upon reset provisions and a 29.30% weighted
3-month  LIBOR plus 100 basis points (the "Rental  Rate").  The annual rent will
then be determined by  multiplying  the gross  purchase price of the property by
the Rental Rate for the 29.5 year term of the lease.

The net  purchase  price for the  Pennsylvania  Transaction  is  expected  to be
$3,450,000.  This Company expects to record, subject to the actual closing date,
a reduction in its  existing  debt  obligations  of  $1,900,000  related to this
transaction.  The  Pennsylvania  Transaction  is  expected  to be  treated as an
operating  lease  and  will  generate  an  initially  deferred  pre-tax  gain of
$1,200,000.  The gain will be amortized prospectively in proportion to the gross
rental  charged to expense over the lease term.  Annual rental  payments will be
based on  combination of a fixed market  component  subject to agreed upon reset
provisions  and a 29.30%  weighted  3-month  LIBOR  plus 100 basis  points  (the
"Rental Rate"). The annual rent will then be determined by multiplying the gross
purchase  price of the property by the Rental Rate for the 29.5 year term of the
lease.

                                       11
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS AND PLAN OF OPERATION

We acquired all of the issued and outstanding  shares of  International  Plastic
and  Equipment  Corp.  ("IPEC") in exchange for  9,489,796  shares of our common
stock  effective  January  28,  2002.   Following  the  acquisition  the  former
shareholders of IPEC held a majority of our total issued and outstanding  common
shares;  IPEC was thereby  deemed to be the acquirer  through a reverse  merger.
IPEC  has  continued  as the  operating  entity  and  its  historical  financial
statements have replaced those of the parent company.

The following  discussion  of our results of  operations  for the three and nine
months ended September 30, 2003 should be read in conjunction with our condensed
consolidated   financial  statements  (unaudited)  and  related  notes  included
therein.

OVERVIEW

We,  through IPEC,  are engaged in the  manufacture  of tamper  evident  plastic
closures and the design and fabrication of capping equipment.

RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2003

THREE MONTHS ENDED  SEPTEMBER  30.  Operating  income for the three months ended
September 30, 2003 decreased  $436,267  (63.0%) from the comparable 2002 period.
Sales for 2003  increased  by $539,718  (14.2%)  while 2003  operating  expenses
increased  by $975,985  (31.5%).  Non-operating  expenses  decreased  by $18,139
(11.9%)  primarily due to lower  borrowing  rates.  This resulted in 2003 income
before taxes being $418,128 (77.4%) lower than that of the previous year.

Cost of good sold of  $3,364,017  was higher as a percentage of sales (77.7%) as
compared to 2002 (70.1%) due to the increased  price of the cost of resin passed
onto our  customers  without  mark-up  having a negative  effect on our  overall
profit margin percentage,  the continued consolidation of our customer portfolio
and intensified market pricing  competition.  In addition,  in an effort to grow
the Company's  sales volumes,  we have entered new closure markets that required
an outlay of initial  start-up  costs for the three months ended  September  30,
2003.

Selling expenses for 2003 increased  $155,178 (82.0%)  reflecting  higher travel
for the quarter in  comparison  to the same time period in the previous year and
the addition of new sales and service  personnel to  accommodate  the  Company's
increased sales volumes.

General  and  administrative   expenses  for  2003  increased  $115,818  (46.2%)
reflecting  the  addition  of two new  Company  executives  and  routine  salary
increases.   The  Company   believes   that  it  has  in  place  a  general  and
administrative  infrastructure  that will be able to sustain future sales growth
and does not anticipate any significant future personnel  expansion in this area
of operations.

We accrued  $44,391 of income taxes in the third quarter using an effective rate
of  approximately  38%.  As a result,  net  income  for the three  months  ended
September  30, 2003 is $77,836,  as  compared to $446,355  for the three  months
ended September 30, 2002.

NINE MONTHS ENDED  SEPTEMBER 30. Sales  increased by $1,400,786  (13.1%) for the
nine-month  period from the previous year and cost of goods sold also  increased
to $9,053,431 or 74.7% of sales, as compared to $7,447,811 or 69.4% of sales for
2002.  The cost of resin,  the raw material  used to  manufacture  our products,
increased  significantly  in the first  quarter of 2003  primarily  triggered by
increases in our supplier's petroleum based feedstock.  We were not able to pass
this increased cost to our

                                       12
<PAGE>

customers  through price  adjustments  until the second quarter.  This situation
coupled  with  the  continued   consolidation  of  our  customer  portfolio  and
intensified  market  pricing   competition   resulted  in  lower  profit  margin
percentages in comparison to the previous year.

Selling  expenses  for the nine months  ended  September  30, 2003  increased by
$460,743  (78.2%)  from the  previous  year due to the  addition new service and
sales personnel.  We also incurred initial  conversion costs associated with our
customers' blow mold neck tooling to accommodate our closures. In addition, with
an increased  customer base, our  salespeople and service  technicians  incurred
more  visits to  customer  locations,  thereby  increasing  travel  and  related
expenses.

General and administrative expenses for the nine months ended September 30, 2003
increased by $233,943  (25.9%) from the previous year.  This increase  reflects,
among other items,  the addition of two new Company  executives,  routine salary
increases,  investment  banking fees,  directors' fees and the cost of complying
with new regulations promulgated by the Securities and Exchange Commission.  The
Company   believes   that  it  has  in  place  a  general   and   administrative
infrastructure  that will be able to sustain  future  sales  growth and does not
anticipate any significant personnel expansion in this area of operations.

Non-operating  expenses decreased slightly by $23,707 (5.2%) for the nine months
ended September 30, 2003 as compared to the previous year primarily due to lower
borrowing rates offset by a decrease in the amount of capitalized interest.

We accrued $172,891 of income taxes for the nine months ended September 30, 2003
using an effective rate of approximately 38%. As a result, we had net income for
the first nine months of 2003 of  $279,770,  as  compared  to pre-tax  income of
$1,031,274 for 2002.

LIQUIDITY AND FINANCIAL CONDITION

CASH AND CASH EQUIVALENTS.  At September 30, 2003, the Company had cash and cash
equivalents of $737,573.  In addition,  we had a working  capital  deficiency of
$2,459,692,  as compared to a  deficiency  of  $1,383,276  at December 31, 2002,
primarily due to increased accounts payable, bank line of credit and the current
portion of  long-term  debt and  capital  lease  obligations.  As  disclosed  in
footnote 10 to the  consolidated  financial  statements,  the Company has signed
commitment  letters and obtained  board approval for two separate sale leaseback
transactions.  These  transactions  are  anticipated to generate $1.6 million in
cash flows upon their  consummation.  Management believes that existing cash and
cash  equivalents  together with  anticipated  cash flow from operations will be
adequate to fund the Company's operations, debt service requirements and capital
expenditures throughout fiscal 2004. The Company may require additional funds to
support operations and may seek to raise additional funds through debt financing
or other  sources.  There can be no assurance  that  additional  funding will be
available at all, or that if  available,  such  financing  will be obtainable on
terms favorably to the Company.

OPERATING  ACTIVITIES.  Our operations  provided cash of $1,003,230 for the nine
months  ended  September  30, 2003,  as compared to the  previous  year when our
operations  provided  cash of  $1,556,938.  The  decrease  in cash  provided  by
operations  during 2003 was due  primarily to decreases in net income and income
taxes  payable  alongside  increases  in our  accounts  receivable  and  prepaid
expenses  partially  offset by a reduction in our on-hand  inventory  value. The
increases  to  accounts  receivable  are  primarily  due to an  increase  in our
customer base and seasonal sales to some of our customers.

INVESTING  ACTIVITIES.  During the nine months ended September 30, 2003, we used
$1,434,558  primarily  for  property,  plant,  and  equipment,  as  compared  to
$1,664,373 during the previous year.

                                       13

<PAGE>

FINANCING ACTIVITIES. In 2003, we paid down capital lease obligations ($171,124)
and notes payable ($1,074,636),  while net borrowing an additional $2,330,000 on
our bank  line of  credit,  for net cash of  $1,084,240  provided  by  financing
activities.  A significant  portion of funds borrowed on our line of credit were
used to fund the  creation  of molds for new  product  lines with a  significant
portion active in production on September 30, 2003 and the expectation  that all
molds will produce  product by December  31, 2003.  During the 2002 fiscal year,
($804,122) was used in financing  activities  comprised of $955,000  borrowed on
our line of credit and an increase  in our notes  payable of  $784,228.  We also
paid down  ($1,315,000)  on our line of credit,  reduced  amounts due to related
parties by ($700,000), and reduced capital lease obligations by ($109,894).

CONTRACTUAL OBLIGATIONS

As of  September  30,  2003,  the Company  concentration  in variable  rate debt
instruments  is  approximately  79%  of its  total  outstanding  debt  portfolio
comprised of an average  borrowing rate of 4.10%.  The Company's fixed rate debt
instruments  bear an  average  rate of  7.92%  as of  September  30,  2003.  The
following additional information regarding the Company's contractual obligations
is provided as of September 30, 2003:

<TABLE>
<CAPTION>
                                                                       Payment Due By Period
                                                     ---------------------------------------------------------
                                                     Three Months    2004-2006     2007-2008       After 2009
                                                     ------------  -------------  ------------    ------------
<S>                                                    <C>           <C>              <C>          <C>
Long-term debt, including current portion (1)<F1>        350,583     4,237,317        371,859      1,114,127
Bank line of credit (2)<F2>                            4,880,000           -              -              -
Capital Lease Obligations (3)<F3>                          9,196        54,896          9,246            -
Operating Lease Obligations (4)<F4>                        9,551        37,575

<FN>
<F1>
(1)      The  Company's  long-term  debt  bears  fixed  rates from 7.5% to 8.0%.
         Variable debt  components  bear interest at prime (4.0% as of September
         30, 2003) or the five year  treasury plus 275 basis points (5.70% as of
         September 30, 2003).  The debt is  securitized by various assets of the
         Company  including  its  principal  production  facilities  and certain
         equipment.

<F2>
(2)      The Company's bank line of credit is payable upon demand. Generally, it
         is  securitized  by an  80%  loan  to  value  ratio  on  the  Company's
         receivable  and  equipment  balance  not  securitized  under (1) above,
         subject to certain adjustments as defined in the debt indenture.

<F3>
(3)      The  Company has  acquired  certain  machinery,  office  equipment  and
         vehicles under non-cancelable capital lease obligations.

<F4>
(4)      The  Company  leases  certain  office   equipment  and  vehicles  under
         operating leases.
</FN>
</TABLE>

RELATED PARTY TRANSACTIONS

The Company incurs certain related party  transactions  throughout the course of
its  business.  Except for the issuance of a $605,000  shareholder  note payable
which was both  issued  and paid by the  Company  during the nine  months  ended
September  30, 2003,  there have been no  significant  additional  related party
transactions  from  those  disclosed  in Note 12 to the  Consolidated  Financial
Statements of the Company's most recent annual report on Form 10-KSB.


                                       14
<PAGE>


PLAN OF OPERATIONS

IPEC's primary strategy is to increase its plastic closure sales by aggressively
increasing its market share in the  non-carbonated  beverage  sector of the caps
and closures  industry.  Management  has  identified 4 areas of focus to support
this strategy:

         (i)      Continuing its commitment to research and development  leading
                  to new product innovations;
         (ii)     Emphasizing customer support and total product solutions;
         (iii)    Continuing to enhance low cost manufacturing capabilities; and
         (iv)     Expanding sales initiatives.

Management of the Company believes that it has in place a significant portion of
the capital and administrative  infrastructure  required to support growth up to
three  times its 2002  production  levels.  The  Company  intends  to sustain in
current  capacity and increase its overall  closure sales to  approximately  4.0
billion  closures  within the next three years.  With the goal of this operating
capacity, Company management projects the following capital expenditures through
2006.

<TABLE>
<CAPTION>

        YEAR                 DESCRIPTION                                          AMOUNT             TOTALS
        ----                 -----------                                          ------             ------
        <S>                  <C>                                        <C>                     <C>

        2003                 Machinery and equipment                              90,000
        (3 months)           Molds                                                50,000
                                                                        -----------------
                             Total 2003                                                            $140,000

        2004                 Machinery and equipment                             400,000
                             Molds                                               200,000
                             Alabama warehouse expansion                         870,000
                                                                        -----------------
                             Total 2004                                                           1,470,000

        2005                 Machinery and equipment                             400,000
                             Molds                                               200,000
                                                                        -----------------
                             Total 2005                                                             600,000

        2006                 Machinery and equipment                             400,000
                             Molds                                               200,000
                                                                        -----------------
                             Total 2006                                                             600,000
                                                                                                -----------

                             TOTAL                                                              $ 2,810,000
                                                                                                ===========
</TABLE>


To provide the cash  necessary to support this business plan through 2006,  IPEC
anticipates  that it will generate cash flow of $1.2,  $1.5 and 1.7 million from
operations  during the next three  years.  As  disclosed  in  footnote 10 to the
consolidated  financial  statements,  IPEC anticipates  consummating in December
2003 a  sale-leaseback  transaction  for its two primary  production  facilities
expected  to  generate  approximately  $1.6  million  in free cash  flow.  These
proceeds  accompanied  with a conversion of a portion of its bank line of credit
to a term note will  enable IPEC to execute  its  business  plan and retire $3.2
million in debt obligations through 2006.

                                       15
<PAGE>

FORWARD-LOOKING STATEMENTS

Under the "safe harbor" provisions of the Private  Securities  Litigation Reform
Act of  1995  (the  "PSLRA"),  we  caution  readers  regarding  forward  looking
statements  found in this report and in any other  statement  made by, or on our
behalf,  whether  or not in future  filings  with the  Securities  and  Exchange
Commission.  Forward-looking  statements  are statements not based on historical
information and which relate to future operations, strategies, financial results
or other  developments.  Forward looking  statements are necessarily  based upon
estimates and assumptions that are inherently  subject to significant  business,
economic and  competitive  uncertainties  and  contingencies,  many of which are
beyond our control and many of which, with respect to future business decisions,
are subject to change.  These  uncertainties and contingencies can affect actual
results and could cause actual results to differ materially from those expressed
in any forward  looking  statements  made by or on our behalf.  We disclaim  any
obligation to update forward-looking statements.


ITEM 3.  CONTROLS AND PROCEDURES

We carried out an evaluation required by the 1934 Act, under the supervision and
with  the  participation  of  our  principal  executive  officer  and  principal
financial  officer,  of the  effectiveness  of the design and  operation  of our
disclosure  controls and  procedures as of the end of the period covered by this
report. Based on this evaluation,  our principal executive officer and principal
financial  officer  concluded  that our  disclosure  controls and procedures are
effective  in  timely  alerting  them to  material  information  required  to be
included  in our  periodic  SEC  reports.  It should be noted that any system of
controls is based in part upon certain assumptions designed to obtain reasonable
(and not  absolute)  assurance  as to its  effectiveness,  and  there  can be no
assurance that any design will succeed in achieving its stated goals.

During the most recent fiscal quarter,  there has not occurred any change in our
internal control over financial  reporting that has materially  affected,  or is
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.



                                       16
<PAGE>


                            PART II OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS

              We are not a party to any pending  legal  proceedings,  other than
              routine litigation deemed incidental to our business.

ITEM 2.       CHANGES IN SECURITIES

              None

ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

              None.

ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

              None.

ITEM 5.       OTHER INFORMATION

              None.

ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K

<TABLE>
              (a)    Exhibits:

<CAPTION>
                  REGULATION
                  S-B NUMBER                                          EXHIBIT
                     <S>          <C>
                     2.1          Share Exchange Agreement between Golden Hole, Inc. and International Plastics
                                  and Equipment Corp. dated January 14, 2002 (1)<F1>
                     3.1          Restated Articles of Incorporation (2)<F2>
                     3.2          Bylaws (2)<F2>
                     4.1          Description of Series A Convertible Preferred Stock (3)<F3>
                     10.1         December 23, 1998 Loan Documents with First Western Bank (3)<F3>
                     10.2         January 13, 2000 Loan Documents with First Western Bank (3)<F3>
                     10.3         January 11, 2001 Loan Documents with Sky Bank (3)<F3>
                     10.4         February 25, 2002 Loan Documents with Sky Bank (3)<F3>
                     10.5         Series A Convertible Preferred Stock Purchase Agreement dated January 1, 2000
                                  (3)<F3>
                     10.6         Consulting Agreement dated January 1, 2000 with Sherwood LLC (3)<F3>
                     10.7         Payment and Severance Agreement and Guarantee dated January 2, 2001 (3)<F3>
                     10.8         Consulting Agreement dated January 1, 2001 with Sherwood LLC (3)<F3>
                     10.9         2002 Stock Option Plan (2)<F2>
                     16.1         Letter from Baier & Williams dated July 24, 2003 (4) <F4>

                                       17
<PAGE>
<CAPTION>
                  REGULATION
                  S-B NUMBER                                          EXHIBIT
                     <S>          <C>
                     21.1         Subsidiaries of the registrant (3)<F3>
                     31.1         Rule 13a-14(a) Certification of Chief Executive Officer
                     31.2         Rule 13a-14(a) Certification of Chief Financial Officer
                     32.1         Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section
                                  906 of the Sarbanes-Oxley Act of 2002
                     32.2         Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section
                                  906 of the Sarbanes-Oxley Act of 2002

<FN>
<F1>
         (1)      Incorporated by reference to the exhibits to the  registrant's
                  current report on Form 8-K dated January 28, 2002, file number
                  0-30721.
<F2>
         (2)      Incorporated by reference to the exhibits to the  registrant's
                  current  report on Form 8-K dated April 15, 2002,  file number
                  0-30721.
<F3>
         (3)      Incorporated by reference to the exhibits to the  registrant's
                  annual  report  on Form  10-KSB  for  the  fiscal  year  ended
                  December 31, 2001, file number 0-30721.
<F4>
         (4)      Incorporated by reference to the exhibits to the  registrant's
                  quarterly report on Form 10-QSB for the quarter ended June 30,
                  2003, file number 0-30721.
</FN>
</TABLE>


(b)      Reports on Form 8-K:

We filed or furnished one report on Form 8-K during the quarter ended  September
30, 2003. Information regarding this item is reported as follows:

DATE FILED OR FURNISHED         ITEM NO.        DESCRIPTION
---------------------------     -------------   ------------------------------
September 15, 2003                   4          Change in certifying accountant


                                   SIGNATURES

In accordance with the  requirements of the Exchange Act, the Registrant  caused
this  report to be  signed on its  behalf  by the  undersigned,  thereunto  duly
authorized.

                                            IPEC HOLDINGS INC.



Date:  November 14, 2003                        By:      /S/ SHAWN C. FABRY
                                                   ----------------------------
                                                Shawn C. Fabry
                                                Chief Financial Officer

                                       18